CMS chief Tavenner's out; politics complicate replacing her

(Story updated at 6 p.m. ET.)

CMS Administrator Marilyn Tavenner announced Friday that she will be leaving the CMS at the end of February. Her replacement, at least temporarily, will be Andy Slavitt, formerly a UnitedHealth Group executive who is now principal deputy administrator. Tavenner, 63, spent more than three years in the post.

Speculation will now turn to whom President Barack Obama might nominate to replace Tavenner and if any nominee can gain approval from the Republican-controlled Senate.

“I think it's going to be very hard to get someone confirmed into this role,” said Dr. Scott Gottlieb, a scholar with the American Enterprise Institute, a conservative think tank. “I wouldn't be surprised to see someone act in the role for a prolonged period and then be appointed for the final year during a recess.”

It would be difficult for Obama to find a replacement with Tavenner's political relationships. Gottlieb called her “responsive” to congressional Republicans, for example.

Tom Scully, a former CMS administrator and current general partner at investment firm Welsh, Carson, Anderson & Stowe, said that he was “surprised she didn't leave earlier.”

Scully, who considers Tavenner a friend and a talented administrator, said that Tavenner had told him she was considering leaving earlier due to the job's intense pressures.

Tavenner's talents in policy and politics had allowed her to maintain good relationships on both sides of the aisle, Scully agreed. “Most Republicans like her. They don't like the administration, but they like her,” he said.

“She has a uniquely detailed understanding of healthcare policy” and the politics of her role, he said.

Indeed, most Congressional Republicans offered positive opinions of Tavenner. “Marilyn has done a great job in a very difficult position under near impossible circumstances,” said Sen. Orrin Hatch (R-Utah).

Sen. Chuck Grassley (R-Iowa) said that he had a “positive working relationship” with Tavenner, though he could not resist criticizing what he called the “misguided new healthcare law” that she helped implement.

One Congressional Republican offered a negative opinion. Rep. Darrell Issa (R-Calif.) criticized Tavenner and HHS for what he called the inflated-enrollment scandal, likely referring to the news late last year that first-year healthcare insurance enrollment numbers included dental insurance enrollees.

“Tavenner had to go,” he said. The scandal was “a deplorable example of an agency trying to scam the American people.”

Many CMS watchers already are wondering whether, given the history of the job and the current political environment, a permanent replacement is likely.

“I think we went six or seven years without a confirmed head, so it wouldn't be stunning” to lack a permanent replacement, Scully said, referring to past periods in the CMS' history.

And the politics are different than in previous periods. Obama, a Democrat, will be nominating an administrator for approval from a majority-Republican Senate.

Sen. Lamar Alexander (R-Tenn.), the chair of the Senate's Health, Education, Labor and Pensions Committee, put his stake in the ground regarding a potential replacement in a statement.

“I urge the president to nominate someone to replace Ms. Tavenner who will work with Congress to make the structural reforms necessary so that seniors can count on Medicare to pay their hospital bills,” he said, referencing specifically his Fiscal Sustainability Act, which would trim federal Medicare and Medicaid spending by $739 billion over the next 10 years.

If there is no permanent replacement, the role will fall to Slavitt and the current deputies, who Scully feels are up to the challenges CMS faces—including implementing ICD-10, meaningful use and interoperability. “Marilyn is uniquely talented, but they've got a pretty good bench,” he said.

Joel Ario, a former CMS official and current managing director at Manatt, Phelps and Phillips, echoed Scully's praise of Tavenner. Slavitt, he said, “should be confirmable as well if Congress is interested in competence.”

Tavenner's farewell letter to CMS staff (PDF) and HHS Secretary Sylvia Mathews Burwell in a staff letter (PDF) regarding Tavenner's departure, focused on the agency's role in decreasing Medicare's cost.

“Under her watch, the solvency of the Medicare Trust Funds was extended to 2030,” Burwell wrote. “In addition, her work on healthcare quality helped our nation achieve a 17% reduction in hospital-acquired conditions—saving an estimated 50,000 lives and $12 billion in healthcare costs.”

Tavenner mentioned, favorably, some of her agency's efforts in alternative payment structures, such as accountable care organizations, patient-centered medical homes and bundled payments. She also focused on efforts to improve quality, reduce fraud and increase the transparency of agency data.

Both Tavenner and Burwell expressed pride in the smooth functioning of the exchanges in the second enrollment period.

“Through the hard work and determination of this agency, the Marketplace is a success.” Tavenner wrote.

Slavitt, Tavenner's acting replacement, has only recently joined the CMS from the private sector. Before his June 2014 appointment, Slavitt had worked with Optum, which was one of the contractors in the rocky debut of HealthCare.gov. Optum is a unit of UnitedHealth.

Tavenner has served as the top Medicare and Medicaid official during the tumultuous rollout of the Patient Protection and Affordable Care Act. That included the expansion of Medicaid in roughly half the states and major experiments with Medicare payment models.

“With those changes came a whole new set of responsibilities and a spotlight that brightly shown on all of us as we managed the largest federal agency budget, strong opinions across the nation, and our ultimate mission of improving our country's healthcare system and saving lives,” Tavenner wrote in her resignation letter to agency colleagues. “But with your hard work, dedication, commitment and resolve, you cleared the path and laid out a plan for all that we needed to accomplish.”

A CMS spokesman said of Tavenner's decision to leave the agency, “She has been working a 24/7 job for five years. This was a decision that Marilyn came to, deciding to stay through the second Open Enrollment. After five grueling years, she was ready for a break and a change.”

Sen. Tom Carper (D-Del.), who sits on the powerful Senate Finance Committee, said of Tavenner, “The launch of Healthcare.gov was difficult, but Administrator Tavenner was tirelessly committed to correcting the course.”

Accompanying Tavenner's departure will be that of her chief of staff, Aryana Khalid, whose last month will be March.

Follow Darius Tahir on Twitter: @dariustahir